Ontario Real Estate Association has been pushing for a change to the rules
TORONTO: Ontario home buyers may soon be able to find out the prices and conditions of other offers in bidding wars.
The government launched a consultation Thursday looking at the Real Estate and Business Brokers Act, and that’s one rule they’re looking at changing. Currently, if there are multiple bids on a home, the seller’s broker can only disclose the number of competing offers, but not the details of them.
Through this method in a hot housing market, buyers often can blindly offer more than what they initially planned on spending in hopes of beating their competitor.
“Allowing registrants to disclose the details of competing offers to other bidders may benefit both buyers and sellers by making this process more transparent,” the government says in its consultation document.
“Prospective buyers would have better information to inform their decisions, while sellers would know that potential buyers had not been deterred by the prospect of a blind bidding war.”
The Ontario Real Estate Association has been pushing for a change to that rule and a broader review of the act, and they said they are thrilled consultations are underway.
“The rules governing realtors were set 16 years ago, when smartphones weren’t invented and fax machines were the norm,” CEO Tim Hudak said in a statement.
“The industry has changed tremendously since then. It’s time for the legislation, as well as enforcement and education to catch up with the modern real estate market. Updating the rules will increase professionalism in our industry, which is what realtors want and what home buyers and sellers deserve.”
Bill Walker, the minister of government and consumer services, said he is seeking public input to modernize laws governing real estate professionals, to reduce red tape and strengthen transparency and consumer protection.
“We need to make sure the rules governing real estate professionals, and the brokerages that employ them, are efficient, fair and up-to-date with modern realities,” Walker said in a statement.
The consultation document asks if details of competing bids were to be disclosed in multi-offer situations, should that require the consent of all parties, or should it just be the standard, with parties having the ability to opt out. As well, should the disclosure be limited to those actually making offers on a home, or should it be available to anyone who inquires?
The consultation also ponders escalation clauses, asking if the legislation isn’t changed to allow the details of competing offers to be disclosed, should bidders be banned from submitting offers that automatically increase if higher offers are submitted.
Various other areas of the real estate act are under consideration, and the public can submit feedback until March 15.